Saturday, March 26, 2011

Baidu Baidu closed the week at an all-time high of $134.92 on Friday, March 25, 2011. BIDU was up +11.97% for the week, is up +11.36% for March, and is up +39.77% for 2011. This follows +11.53% for February and +12.53% for January.

S&amp;P 500 By comparison, the overall market, the S&amp;P 500, at 1313.80, was up +2.70% for the week, is down -1.01% for March, and is up +4.47% for 2011. SPX is +94.20% since the March 9, 2009 market cyclical low. SPX closed at a multi-year closing high of 1343.01 on Friday, February 18, 2011, the highest close since the June 17, 2008 close of 1350.93. BIDU is outperforming the overall market in 2011. A review of the S&amp;P 500 is here[S&amp;P 500 Regains 1300! (Chart) *Above 20 & 50 day averages*].

Baidu Fundamentals Baidu reported stellar fourth quarter 2010 financial results on January 31, 2011. These financial results are reviewed and analyzed on this blog at the Baidu Financial Performance page.

Price Earnings Ratio = 87.64, has been high 90s to low 100s in past year

Market Capitalization = $47.02B (Yahoo Finance)

Conclusion Baidu has rallied to an all-time high and has outperformed the overall USA equity markets in 2011. Baidu reported incredible financial results on January 31, 2011 for the quarter ended December 31, 2010.

Disclosure We are long BIDU.

About Baidu

Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs, each of which represents one Class A ordinary share, currently trade on the NASDAQ Global Select Market under the symbol "BIDU".

The Baidu Story

Many people have asked about the meaning of our name. "Baidu" was inspired by a poem written more than 800 years ago during the Song Dynasty. The poem compares the search for a retreating beauty amid chaotic glamour with the search for one's dream while confronted by life's many obstacles. "…hundreds and thousands of times, for her I searched in chaos, suddenly, I turned by chance, to where the lights were waning, and there she stood." Baidu, whose literal meaning is hundreds of times, represents persistent search for the ideal.

Baidu chose a poetic Chinese name because it wants the world to remember its heritage. As a native speaker of the Chinese language and a talented engineer, Baidu focuses on what it knows best - Chinese language search. Applying avant-garde technology to the world's most ancient and complex language is as challenging as it is exciting. At least people here at Baidu think so. As having diligently disclosed in the Prospectus of our recent Initial Public Offering, we believe there are at least 38 ways of saying "I" in Chinese. It is important that we master all the ways of addressing oneself in Chinese because our users depend on us to address every one of their daily queries. And trust us, pin pointing queries in the Chinese language is an art rather than a science.

Our mission is to provide the best way for people to find information. To do this we listen carefully to our users' needs and wants. Have we collected all the Chinese web pages they want to see? Are the pages current and up to date? Are the search results closely related to their queries? Did we return those search results instantly? To improve user experience, we constantly make improvements to our products and services. For example, we introduced "phonetic" or "pin-yin" search which allows our users to type in Chinese keywords using English alphabets. This feature is designed to skip the switching from English inputting to Chinese inputting and for when the user is not sure of the written form of a keyword. Our users definitely notice the many little things that we do differently to ensure a simple and reliable search experience every time.

In addition to serving individual users, we also serve as a media platform for online marketing customers. We not only provide our customers easy access to one of the largest online audiences in China but also targeted groups with defined interests as indicated by queries. Unlike traditional online advertising services which charge by flat fee, our marketing products and services are performance based. Our Pay for Performance model has taken the market by storm because it is cost effective and measurable.

We know that a lot of interesting things are going on in the Internet space, but we don't want to lose focus. China's Internet search industry is only a newly discovered territory. We see vast untapped grounds in our home base and we believe there are still plenty of prizes to be claimed by the best players.

Saturday, March 19, 2011

Baidu Baidu closed the week at $120.50 on Friday, March 18, 2011. BIDU was down -3.57% for the week, is down -0.54% for March, and is up +24.83% for 2011. This follows +11.53% for February and +12.53% for January.

S&amp;P 500 By comparison, the overall market, the S&amp;P 500, at 1279.20, was down -1.92% for the week, is down -3.62% for March, and is up +1.71% for 2011. SPX is +89.08% since the March 9, 2009 market cyclical low. SPX closed at a multi-year closing high of 1343.01 on Friday, February 18, 2011, the highest close since the June 17, 2008 close of 1350.93. BIDU is outperforming the overall market in 2011. A review of the S&amp;P 500 is here[S&amp;P 500 Tests 100 Day Average (Chart) *Global tumult continues*].

Baidu Fundamentals Baidu reported stellar fourth quarter 2010 financial results on January 31, 2011. These financial results are reviewed and analyzed on this blog at the Baidu Financial Performance page.

Baidu Daily Chart Below is the BIDU daily chart since January 31, 2011 the day before Baidu reported stellar Q4 2010 earnings and gapped up. This is to illustrate the recent price interactions with the current close, resistance, and support.

Conclusion Baidu dipped below the 20 day average but has fared better than the overall USA equity markets recently. BIDU has been in a trading range of approximately 116 -125 since February 23. Baidu reported incredible financial results on January 31, 2011 for the quarter ended December 31, 2010.

Disclosure We are long BIDU.

About Baidu

Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs, each of which represents one Class A ordinary share, currently trade on the NASDAQ Global Select Market under the symbol "BIDU".

The Baidu Story

Many people have asked about the meaning of our name. "Baidu" was inspired by a poem written more than 800 years ago during the Song Dynasty. The poem compares the search for a retreating beauty amid chaotic glamour with the search for one's dream while confronted by life's many obstacles. "…hundreds and thousands of times, for her I searched in chaos, suddenly, I turned by chance, to where the lights were waning, and there she stood." Baidu, whose literal meaning is hundreds of times, represents persistent search for the ideal.

Baidu chose a poetic Chinese name because it wants the world to remember its heritage. As a native speaker of the Chinese language and a talented engineer, Baidu focuses on what it knows best - Chinese language search. Applying avant-garde technology to the world's most ancient and complex language is as challenging as it is exciting. At least people here at Baidu think so. As having diligently disclosed in the Prospectus of our recent Initial Public Offering, we believe there are at least 38 ways of saying "I" in Chinese. It is important that we master all the ways of addressing oneself in Chinese because our users depend on us to address every one of their daily queries. And trust us, pin pointing queries in the Chinese language is an art rather than a science.

Our mission is to provide the best way for people to find information. To do this we listen carefully to our users' needs and wants. Have we collected all the Chinese web pages they want to see? Are the pages current and up to date? Are the search results closely related to their queries? Did we return those search results instantly? To improve user experience, we constantly make improvements to our products and services. For example, we introduced "phonetic" or "pin-yin" search which allows our users to type in Chinese keywords using English alphabets. This feature is designed to skip the switching from English inputting to Chinese inputting and for when the user is not sure of the written form of a keyword. Our users definitely notice the many little things that we do differently to ensure a simple and reliable search experience every time.

In addition to serving individual users, we also serve as a media platform for online marketing customers. We not only provide our customers easy access to one of the largest online audiences in China but also targeted groups with defined interests as indicated by queries. Unlike traditional online advertising services which charge by flat fee, our marketing products and services are performance based. Our Pay for Performance model has taken the market by storm because it is cost effective and measurable.

We know that a lot of interesting things are going on in the Internet space, but we don't want to lose focus. China's Internet search industry is only a newly discovered territory. We see vast untapped grounds in our home base and we believe there are still plenty of prizes to be claimed by the best players.

Official Statement by The Conference Board Beijing, March 16, 2011…The Conference Board Leading Economic Index® (LEI) for China increased 0.3 percent in January to 155.0 (2004 = 100), following a 0.5 percent decline in December and a 0.5 percent increase in November. Two of the six components contributed positively to the index in January. Says The Conference Board China Center resident economist Bill Adams: "The LEI’s modest increase in January, following a large decline in December, points to slower economic expansion in coming months. In January, consumer expectations continued to fall, probably related to rising inflation. Weakening consumer sentiment, tighter credit, and lower export orders were offset by a large rebound in construction activity."

Trend The trend has been upwards with December 2010 the only decrease. The December decrease was the only dip in 2010.

Cycle History The November 2010 (preliminary) reading of 155.4 has been the intermediate term high and the January 2010 reading of 142.8 has been the intermediate term low.

China Monthly Leading Economic Index (Chart) Below is a chart of the China Monthly Leading Economic Index for the latest 13 months, from January 2010 through January 2011.

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Commentary China continues phenomenal economic growth and the January LEI of 155.0 is just below the November 2010 peak of 155.4. Whether there will be a slowdown in Q1 2011 compared to the strong 2010 GDP growth (+10.3% YoY) remains to be seen. China is now the second largest economy in the world as reviewed here [China Now Second Largest Economy in the World (Video, GDP Chart) *Surpasses Japan as #2*]

About The Conference Board The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.

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